TSX down deSpiTe bankS’ earningS riSe

The Toronto stock market closed slightly lower Thursday despite strong earnings reports from TD Bank, CIBC and National

Bank . The S&P/TSX composite index drifted 6.16 points lower to 12,151.13. The market did get some lift from grocer

Loblaw Companies Ltd. Its stock soared 13.69% to $38.20 on very heavy volume of 10.3 million shares after the company said it wants to unlock shareholder value by creating one of the largest real estate investment trusts in Canada.

Units of the REIT are expected to be sold in an initial public offering to be completed in mid-2013, subject to regulatory approvals. Shares in Loblaw majority owner

George Weston ran up 6.78% to $67.71. The financials sector was the biggest decliner as TD Bank’s quarterly profit amounted to $1.66 per share before adjustments, down 2¢ per share from the same time last year. On an adjusted basis, TD had $1.83 per share of diluted earnings, up from $1.75 per share a year earlier and 2¢ a share above a consensus estimate. Its shares dropped $1.46 to $81.12 as revenue totalled $5.89 billion, slightly less than the $6 billion that analysts expected.

TD also announced it is buying the U.S.based Epoch investment management business for US$668 million in cash.

CIBC shares dipped 38¢ to $80.14 as the bank had $852 million or $2.02 per share of net income in the fourth quarter, an increase of nearly $100 million from the same time last year. On an adjusted basis, CIBC’s fourth-quarter profit amounted to $2.04 per share, 6¢ above estimates. Revenue totalled $3.16 billion, slightly missed analyst forecasts of $3.2 billion.

And National Bank’s quarterly earnings ran ahead 20% from a year ago to $351 million or $1.97 per share. Ex-items, the bank earned $1.93 a share, which matched expectations.

National is also upping its dividend by 5% to 83¢ a share but its shares gave back $1.11 to $76.66.

The TSX Venture Exchange gained 2.16 points to 1,186.7.

The Canadian dollar was up 0.06¢ at US100.9¢.

U.S. indexes were modestly positive as traders hoped that lawmakers are getting closer to an agreement that would avert a fiscal crisis at the end of the year.

The Dow Jones industrials rose 39.55 points to 13,074.04, the Nasdaq was up 15.57 points to 2,989.27 while the S&P 500 index was up 4.66 points to 1,413.94.

Traders were encouraged by reports that a substantial number of Republicans had signed a letter calling for exploration of “all options” on taxes and entitlement programs.